Is there good news?
We are undoubtedly in the midst of the most challenging environment for financing for the biopharma industry in at least two decades - probably three. The capital that flooded the industry from 2018 to 2021 will not come back any time soon. Many private company investors are focused on keeping existing portfolio companies afloat, and are making few new investments. Through the first half of 2025, venture funds have raised new capital at the slowest pace in a decade. The public-focused funds have seen redemptions, precipitous drops in NAV, and an ongoing risk of markdowns to the private side of their portfolio, which is reflected in the paucity of public-market financing activity.
Moving from an early-stage, discovery-focused company to a milestone-driven clinical development story has enormous challenges, not the least of which is finding the money to do the work. Can you articulate clear clinical and commercial differentiation, supported by data? Does your clinical development plan contemplate multiple and hopefully unambiguous de-risking readouts? Will your CMC process scale to a Phase 3 / commercial process? What does the FDA and the EMA think of your development plan? If you can articulate clear answers to key questions like those above, you have a much better chance of securing funding.
The pace of biopharma investment in 1H25 does remain much lower than 2019-21. However, several large new funds have come into the scene in the last few years, and many established players have raised new funds. Corporate VCs remain very active. The recent uptick in M&A is returning billions in cash to public and private funds alike. Over the last several quarters, the dollar volume of private company biopharma investments are modestly improved from the lows seen in 2022-23 (albeit skewed by a small number of mega-rounds in recent years).
New money can be found! My philosophy for fundraising - whether it is equity, debt or a strategic partnership - is simple. Tell the person on the other side of the table why they should care - how they can make money. Clearly communicate the risks as you understand them. And explain why you have those risks under control. Combining such transparency with clear answers to the questions above is critical.